When two chains combine

Supply chain meets blockchain

Proposal title goes here |
 Section title goes here

b
 When two chains combine | Supply chain meets blockchain

Contents

Introduction 1
Blockchain context 3
Why blockchain makes sense 4
Blockchain industry activity 5
Blockchain considerations and challenges 14
Contacts 16

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When two chains combine | Supply chain meets blockchain

Introduction
In an increasingly digitised world, emerging technologies,
such as blockchain, afford organisations the opportunity
to drive business value throughout their supply networks.
According to Eric Piscini, Principal and Global Blockchain
Leader at Deloitte Consulting LLP in the US,

Supply chains across Building supply chain capabilities with Today’s supply chain challenges and
digital technologies can result in greater how blockchain can help
industries and countries levels of performance. Blockchain is Supply chains encompass the end-to-
will be reimagined, an enabling technology, which is most end flow of information, products and
effective when coupled with other services, and money. The way these
improved and disrupted by next generation technologies such as components are managed affects an
blockchain technologies. Internet of Things (IoT), robotic cognitive organisation's competitive positioning
automation or smart devices. in areas such as product cost, working
We now have safer and capital requirements, speed-to-market,
more efficient ways to In this paper, Deloitte’s and service perception. Organisations
are exploring innovative methods to
connect with business blockchain and supply streamline their supply chains to meet
partners as well as to track chain professionals evolving consumer demands and
optimise efficiencies. Technological
and exchange any type of share insights on how advances are collapsing linear supply
asset. The ability to deploy blockchain-enabled chains into dynamically connected and
always-on digital supply networks (DSN),
blockchain technologies to technology can transforming how businesses exchange
create the next generation mitigate four cross- and share information and assets.
According to a Deloitte 2016 article titled
of digital supply chain industry supply chain ‘Aligning the organisation for its digital
networks and platforms issues — traceability, future,’ 90 percent of organisations feel
they are not adequately prepared for
will be a key element in compliance, flexibility the industry disruptions from these
business success. and stakeholder digital trends. Furthermore, many
believe that 40 percent of Fortune 500
management. The paper companies will not exist in a decade
draws on use cases as a result of these disruptions. These
findings suggest that business leaders
from the pharmaceutical are under growing pressure to innovate
industry (product and reconfigure their supply networks,
maximising value and efficiencies
tracking), automotive while reducing costs in an increasingly
industry (purchasing competitive world.

platform) and food

industry (know your
supplier).

1
 When two chains combine | Supply chain meets blockchain

Despite DSN enhancements, paper-based
processes are still common, resulting in
reduced transparency and collaboration
across networks. Decision making amongst
supply chain actors is further complicated
by disparate systems which provide limited
visibility of other functions. Kai Gindner,
Director at Deloitte Switzerland, states that
for the past two decades, organisations
have been exploring ways to enhance
transparency and data sharing across their
networks. These initiatives have focused
mainly on intra-organisational collaboration These issues are felt across industries and
to gain higher efficiency. need to be addressed before organisations
can unlock the hidden value in their
Gindner believes companies should aim to
supply chains. David Dalton, Partner and
“achieve higher levels of agility, flexibility and
Deloitte EMEA Blockchain Lab sponsor at
transparency, resulting in faster response
Deloitte Ireland, believes that “Traceability
times to the ever-changing ecosystem. The
across supply chains are one of the most
adoption of next generation technologies
compelling use cases for blockchain
allows for new and more advanced collabo-
technology.” Blockchain could be the enabler
ration models with the potential to substan-
to allow organisations to more effectively
tially improve the supply chain performance
tackle these problems.
of each node and the entire network.”

Deloitte supply chain professionals have identified four key supply chain pain points that clients are experiencing across the globe:

Traceability Compliance Flexibility Stakeholder

Management
Supply Chain Capability to Standards The ability to adapt Effective
Pain Points monitor events and controls to rapidly to events governance in
and meta data provide evidence or issues, run place to enable
associated with that regulatory various scenarios, communication,
a product conditions without significantly risk reduction
are met increasing and trust among the
operational costs involved parties

2
When two chains combine | Supply chain meets blockchain

Blockchain context
Blockchain has been described as an
information game changer due to its
unique capabilities and benefits to provide
greater information transparency. At its
core, blockchain is a distributed digital
ledger that lives on the internet and records
transactions and events. The technology
relies on well-established cryptographic
principles and operates as a repository for
information, which is recorded and shared
through a peer-to-peer community. Within
the decentralised network, all participants
maintain their own copy of the ledger,
referred to as a node, where they validate
new entries to the chain through the use of
a consensus protocol.
While one of the primary uses of blockchain The implementation of blockchain
is record keeping, organisations should technology can remediate the
know that blockchain is much more than aforementioned supply chain pain points
simply an enterprise database. While including traceability, compliance, flexibility,
databases are suitable for recalling ad hoc and stakeholder management.
queries of large volumes of structured
and relational data that require complete
privacy within a single organisation’s
parameter, blockchain is designed to record
specific transactions and events that are
shared across a network of parties where
transparency and collaboration is required.
In a supply chain, a private or permissioned
blockchain may be implemented, dictating
users’ ability to read and write to the
blockchain.

Traceability Compliance Flexibility Stakeholder

Management
Supply Chain Capability to Standards The ability to adapt Effective
Pain Points monitor events and controls to rapidly to events governance in
and meta data provide evidence or issues, run place to enable
associated with that regulatory various scenarios, communication,
a product conditions without significantly risk reduction
are met increasing and trust among the
operational costs involved parties

Auditability Immutability Smart Contracts Disintermediation

Blockchain Blockchain provides All blockchain Continuous real-time Blockchain enables
Capabilities a full audit trail of transactions are tracking of data peer-to-peer
data, creating an timestamped and is facilitated interactions which
everlasting means tamper-proof, through the use can be trusted
of record keeping providing a single of smart contracts based on the
along a supply chain source of data across the digital signatures
integrity supply chain

3

Why blockchain makes sense
Globally, Deloitte identifies blockchain as
a key technology with inherent capabilities
to remediate supply chain inefficiencies.
Deloitte EMEA Blockchain Lab, Deloitte’s
blockchain centre of excellence for EMEA,
deployed its first live blockchain solution
with DNV GL, a business assurance
provider that certifies companies’
processes, products, facilities and supply
chains to national and international
standards, proving the capability of this
technology in a production environment.
Blockchain can provide a complete chain
of custody for items that are stored on the
blockchain, from their origin to point of sale.
Furthermore, users can trust the data on
the chain due to its immutability and the
use of digital signatures, which enable non-
repudiation capabilities.
Blockchain’s tracking capabilities (including
timestamping) provide a full audit trail which
gives businesses increased confidence in the
When two chains combine | Supply chain meets blockchain
authenticity and quality of goods, impacting
sourcing decisions. The distributed nature of
the platform allows for greater oversight and
control of products while real-time tracking
via smart contracts gives supply chain
stakeholders the flexibility to make rapid
decisions and update inventory levels on a
continuous basis, thereby reducing working
capital inactivity.
The Deloitte EMEA Blockchain Lab is
working with clients in the retail and
consumer products industry to develop pilot
blockchain solutions for supply chain pain
points.
The Deloitte US Blockchain Lab has
developed a track and trace proof-of-
concept ‘TraceChain’ to enhance the
transparency and visibility of the chain of
custody in global supply chains.
Prototype Highlight: TraceChain
TraceChain, a blockchain-based
supply chain solution, enables the
tracking and tracing of finished goods
and materials, providing users with a
high level of trust that the data they
view and store on the chain is correct
and has not been altered by an
unauthorised party. It also provides
richer data and deeper insights—in
near real-time—into a production
process that is predominantly paper-
based and manual today, thereby
reducing counterfeits and increasing
trust among partners, stakeholders,
and consumers.
TraceChain, a blockchain-based
supply chain solution was developed
by the US Blockchain Lab based on
interactions with our industry leaders
across the Supply Chain Network.
Q:What is it?
It enables the tracking and tracing
of finished goods and materials,
providing users with a high level of
trust that the data they view and
store on the chain is correct and has
not been altered by an unauthorised
party.
Q:How does it work?
Leveraging blockchain, digital
identities have been created for
all physical goods involved in the
supply chain as well as for the various
actors in the chain such as suppliers,
manufacturers, distributors etc.
The immutable nature of blockchain
enables us to record the complete
chain of custody for every item that
is logged to the blockchain from their
origin to the point of sale. This chain
of custody gives increased confidence
and assurance of the authenticity and
quality of goods that leads to better
sourcing decisions.
4
When two chains combine | Supply chain meets blockchain
Blockchain industry activity
Specific use cases have been identified
by Deloitte blockchain professionals
to exemplify industry-wide challenges
for supply chain management. These
cases examine product tracking in the
pharmaceuticals sector, purchasing in the
automotive industry, and know your supplier
issues in the food industry.
Pharmaceutical industry
According to the World Health Organization,
it is estimated that up to $200 billion worth
of counterfeit pharmaceutical products are
sold globally every year and 50% of these
drugs are purchased online. Counterfeiting
usually occurs at the manufacturing source
5
where a contracted manufacturer or
distributor either siphons legitimate drugs
and resells them or enters counterfeit
drugs into the supply chain as ‘authentic’
units. Although electronic drug pedigree
solutions are being implemented to resolve
traceability issues, these systems still rely
on siloed data sources and exchanges
of information via two-way interactions,
suggesting that the marketplace lacks a
technology solution for the problem.
In 2013, US Congress enacted the Drug
Quality and Security Act (DQSA) to
improve patient safety. This Act requires
pharmaceutical companies to ensure the
traceability of prescription drugs throughout
the entire chain by 2024. Stakeholders are
under mandate to identify and report any
illegitimate drugs in the network within
24 hours. Consequently, pharmaceutical
companies are under increased regulatory
pressure to develop innovative and effective
ways to track, report, and share information
with the US Food and Drug Administration
(FDA) across all stages of the supply chain.
Although technologies have been available
for years, traceability still has nowhere near
the level of granularity needed to satisfy
the new regulations. To improve efficiency,
a game-changer is required and blockchain
could be just that.
 When two chains combine | Supply chain meets blockchain

Supply chain use case #1:
Product tracking refers to the tracing of
unit level items (i.e. drugs and medicine)
across the end-to-end supply chain
using blockchain. All stakeholders in the
ecosystem can (1) access the provenance,
(2) authenticate items, and (3) prove
compliance. This is enabled by the real-
time capability and distributed features
associated with the platform. For example,
tracking drugs on the blockchain throughout
their lifecycle—from manufacturing to
patients—could facilitate counterfeit
drug identification or assist drug recall
management.

Pharmaceutical supply chain

Today

Raw Production Distributor Pharmacy/ Patient

Material Hospital
Suppliers

Tomorrow
Pharma
Company

Logistics
Regulator
Providers

Patient Blockchain Pharmacy/

Hospital

Production Raw Material distributed real-time

Suppliers update of information

Distributor

6
When two chains combine | Supply chain meets blockchain
How it would work
Tom Hynes, Director at Deloitte Ireland,
indicates that blockchain is a potential
solution that “can help track how drugs
move from the manufacturer to end
consumer, providing stakeholders
with visibility and improving demand
management, revenue forecasting and
overall performance management.”
Blockchain’s smart contract functionality,
along with the use of IoT devices, could
deliver an effective, continuous drug
tracking capability for pharmaceutical
stakeholders where the full provenance of
a unit, its conditions, authority rights, and
checkpoint approvals could be accessed
at any point in time, thereby enhancing
the complete audit trail of each item in
the chain. Any deviation, such as the drug
temperature, could be captured through
an IoT device, whose data would be input
and tracked via smart contracts on the
blockchain. The smart contract rules would
then execute notifications and actions to
be taken by the affected stakeholders in
charge of that phase of the supply chain.
Smart contracts could be coded to perform
specific tasks and trigger diverse responses
depending on the conditions being
monitored. This would provide organisations
with the ability to automatically respond to
events. For example, if certain pre-defined
conditions are not met, drugs could be
recalled before they are released to the
market. Using detection capabilities for
negative conditions and recalling a drug on
time could not only reduce stakeholders’
compliance risk but could also prevent the
sale of dangerous products and potentially
protect patients from adverse events.
Enhancing the contracts with a digital
signature could also provide stakeholders
with accurate and accountable tracking
throughout a drug’s lifecycle, leading to
disintermediation of the chain by eliminating
the need for certification processes by a
sole authoritative source.
7
Blockchain platforms could be used to
store information and enforce regulatory
rules across the entire supply chain. Smart
contracts used for data storage could follow
a simplified structure, such as:
• Add Item—e.g., ID, location, timestamp,
current stakeholder
• Update Item—e.g., ID, new location, new
timestamp, new stakeholder
• Look Up Item—e.g., ID, retrieve locations,
and retrieve stakeholders
IoT devices could help capture the detailed
information and its flow and provide easy
access to any stakeholder with credentials to
retrieve the information. From a regulatory
perspective, depending on legislative
requirements, blockchain solutions could
act as a reliable source for entities such as
the FDA who could retrieve a full history
of product flows via the blockchain.
Using the same platform, pharmaceutical
companies could prove their compliance
with standards. In addition, the ecosystem
could develop its own in-chain smart
contracts to trigger and notify stakeholders
whenever pre-defined conditions or out of
the ordinary events occurred.
Product tracking is one of multiple use cases
that clearly show how blockchain can be
leveraged to resolve issues of traceability,
compliance and flexibility where multiple
stakeholders depend on one another
for information sharing. Pharmaceutical
companies are already investigating this
game-changing technology, which promises
not only regulatory compliance benefits but
also end-to-end traceability.
Automotive industry
The automotive industry is in the midst of
a historic change with the rise of disruptive
technologies beginning to have a profound
impact on infrastructure, supply chain and
business models. The influx of these new
technologies is driving industry players
to streamline their processes, leading to
shorter product lifecycles, new business
models to meet on-demand preferences,
and the development of different types
of vehicle and in-house vehicle services.
With the emergence of more tech-
oriented products and services, analysis
and management of supply chains has
become more difficult. Original Equipment
Manufacturers (OEMs) now operate in more
countries than ever before and visibility
has worsened across disparate systems. To
proactively address consumer complaints
associated with these issues, Asim Kailash
Agrawal, Manager at Deloitte Malaysia KL,
reports that clients in emerging markets, like
Southeast Asia, intend to leverage market
intelligence in order to “detect product
quality issues at an earlier stage, recall
products quickly, and track the issue back to
the source.”
Nicholas Smith, Director at Deloitte UK,
has noticed that several OEMs are already
exploring the potential of blockchain
technology. As it pertains to the supply
chain of automobiles, he states that the
blockchain provides “great potential in the
tracking, tracing and provenance of parts
in the upstream supply chain and in truly
understanding each individual ‘as-built’
vehicle.” Furthermore, inherent capabilities
of blockchain, such as immutability and
transparency of vehicle records, have
the potential to create an aftermarket
opportunity and a shared purchasing
platform.
Supply chain use case #2:
Purchasing platform:
Purchasing Platform refers to the transfer of
value and interaction amongst all tier level
suppliers and OEMs along the automotive
value chain, facilitating the buying, selling,
and reselling of all types of raw material
and car parts. Stakeholders using the
platform can (1) access information on raw
materials, (2) buy and sell raw materials at
their disposal, and (3) be held accountable
for activities and checks. This is enabled
by the real-time capability, smart contracts
functionality, and distributed features
associated with the platform.
 When two chains combine | Supply chain meets blockchain

Many OEMs today have limited visibility
beyond tier 2 suppliers, and lack meaningful
insight, particularly regarding raw material
levels. Without the necessary supply chain
knowledge or supply chain oversight areas
such as working capital, cash flow levels,
and data analysis are impacted, prohibiting
businesses’ ability to quickly adapt, plan,
and buy or sell. By incorporating blockchain
enabled solutions into infrastructure,
Michael Woodword, Partner at Deloitte UK,
believes that analytics may be improved
and trading relationships may become more
transparent, enabling “an amplification
of trust that is an imperative for supplier
relationship management.”
How it would work
A marketplace for selling, reselling, and
buying raw materials could be built
leveraging smart contracts. These self-
executing blocks of code could be used to:
• Store information about supply and
demand (how much is being bought and
sold, how much suppliers have in stock, etc.)
• Govern sourcing decisions
• Generate requests for materials from
buyers, where suppliers could bid on a
shared open market platform

Automotive supply chain

Today

Tier N Tier 2 Tier 1 OEM* Dealership

Supplier Supplier Supplier *Original Equipment Manufacturer

Tomorrow

OEM

Non-traditional
Logistics
Tech Suppliers

Digital
Consumer
Blockchain Dealership

distributed real-time
update of information

Tier N Tier 1
Supplier Supplier

Tier 2 Supplier
8
When two chains combine | Supply chain meets blockchain

Focusing solely on the open market 3. OEMs could then choose either to charged to the supplier prior to delivery.
platform, the exchange could flow as follows: automatically select a supplier (for Today, stakeholders often have little or no
example, the first supplier to meet the oversight of which player is responsible for
1. An OEM could create a request to
OEM’s requirements) or to select a bottlenecks in the supply chain.
purchase raw materials specifying criteria
supplier manually
such as price, delivery date, etc.
Further clauses could be added to the
2. Suppliers using the platform would be
smart contract to trigger specific events.
notified of the request and could submit
For example, a delay in delivery could result
bids including details of any conditions
in a penalty, which could be automatically
they might wish to impose

Smart contracts in action

Using smart contracts to create a shared marketplace 3A

Automatic buy

1 2 4

For certain
conditions,
Buyer places Bids placed automatically Request closed
request by sellers choose seller

Smart contract Broadcasted Smart contract

created across
3B closed
network

Manual buy

Buyer chooses
the seller

9

The creation of a shared marketplace, using
blockchain technology, can provide users
with full transparency of their inventory
levels along with real-time data updates on
supply and demand. Stakeholders benefit
from better control of their inventory, cash
flows, and sourcing decisions, and can
leverage the system to prove compliance or
delays were associated with certain actors
in the chain if legal actions are required.
According to Lance Younger, Partner at
Deloitte UK, an additional benefit of using
blockchain to manage automotive raw
materials is the potential to de-risk the
supply chain “to reduce the cost per part,
across OEM operations.”
As with most industries, automotive
clients could significantly reduce costs and
enhance visibility by introducing blockchain
technology into the overall supply chain
network. In addition to real-time analytics
and improved recall functionalities, the
inherent capabilities of blockchain merit
investigation to determine how they might
best benefit businesses.
Food industry
Like the pharmaceutical industry, the
food sector faces increased regulatory
pressure from government bodies such
as the US Food and Drug Administration
(FDA) and Federal Trade Commission
(FTC) with standards being introduced
to enforce food safety protocols and
waste disposal procedures and provide
visibility over food management activities
across the product life cycle. The FDA’s
When two chains combine | Supply chain meets blockchain
With customers becoming more knowledgeable
and demanding transparency, it is imperative for
organisations to make data—such as of price, source,
authenticity, or even social obligations—accessible.
Blockchain-based solutions can provide assurance to
not only millennials, but also digital generations, as
access is granted to trusted, secure, and unaltered
information.
Food Safety Modernisation Act (FSMA), In order to respond to the influx of
introduced in 2011, was an effort to shift regulatory food standards, changing
food companies’ focus from responding to consumer demands, and increasing
food contamination to preventing it. Players competition, food players will need to
must be able to quickly analyse data and explore, test, and leverage innovative
continuously track all information to ensure technologies capable of adapting and
they are making optimal and safe food managing their supply chain activities
decisions. In light of growing regulatory on a real-time basis while delivering full
demands, James Cascone, Advisory Partner transparency over their operations and
in Deloitte U.S., explains that blockchain maximum efficiency gains.
“provides the traceability required to provide
higher levels of assurance regarding the
chain of custody of food products.”
In addition, consumers are using smart
devices more often for researching,
purchasing, and reviewing food products
from manufacturers to wholesalers to
restaurants. Instant access to nearly
limitless information has impacted
consumers’ expectations, demand for types
of food products, and buying decisions.
Darshini Dalal, Manager of the Blockchain
Lab in Deloitte US, elaborates,
10
When two chains combine | Supply chain meets blockchain
Based on client and market experience,
Deloitte recognises that restaurants,
retailers, wholesalers, and even suppliers
may not always be able to effectively
trace their food products and identify and
manage the individuals they have direct
and indirect relationships with across each
product’s lifecycle. The main use case at
play, therefore, is Know Your Supplier (KYS).
Supply chain use case #3:
Know your supplier
Know Your Supplier (KYS) refers to the
ability to identify, verify, and endorse
any stakeholder an entity wishes to
conduct or continue to do business with.
All stakeholders using the platform can
benefit from (1) onboarding simplification,
(2) a shared information repository (i.e.
relationship history, provenance of goods
purchased, associated supplier quality
certificates), and (3) reporting capabilities.
This is enabled by the real-time capability,
smart contracts functionality, and
distributed features associated with the
platform.
Food supply chain
1 2
Supply Chain Details
Data Actions:
Relationships Add/update
Products: relationship
Where/When/ Add/update
How product
11
According to Paul Sin, Partner at Deloitte China,
In China, sales volume of counterfeit products can be
easily five to ten times to that of authentic ones, with
alarmingly low quality and safety issues. Blockchain
enables the transparency of the supply chain and
provides traceability to the origins. This is not only
a solid business case for sellers but also has a huge
positive social impact on food safety.
How it would work 1. Supply chain details (i.e., product
Food stakeholders could establish an components and associated lifecycle)
industry-wide platform to onboard and
2. Quality certifications approved by
manage supplier relationships and review
regulated bodies (i.e., approved body, date,
the quality of food products along the entire
expiry data, date of last testing)
chain. Each user in the ecosystem would use
a digital identity to access and participate 3. Endorsements given by food stakeholder
on the platform. Smart contracts could be (i.e., wholesaler, restaurants or end
created to store and manage meta-data and consumer based their own experience,
events associated with supplier onboarding reviews of the food quality)
and relationship maintenance, such as:
Supplier
ID
Company name
Public key
Rating
3
Quality Certification Endorsements
Data: Actions: Data: Actions:
Quality Add/update Stakeholder ID Issue
provider ID certificate Status Revoke
Date Date
State Reason

By using this onboarding platform,
restaurants and wholesalers, for example,
would have end-to-end visibility over
the supplier relationship with real-time
access to monitor and manage all supplier
relationships. Currently, this is not possible
in the marketplace. Platform users
would have a complete audit trail of food
ingredients they buy from the associated
supplier and could prove the product is of
specified quality by checking the quality
certificates of each ingredient uploaded
by the regulated bodies. Given that all
information (i.e., supplier profile, certified
qualifications, food materials) added to the
chain is timestamped, users could retrieve
a full history of the stakeholder relationship
and associated activities. Suppliers are
When two chains combine | Supply chain meets blockchain
incentivised to maintain quality certificates
in order to potentially increase and establish
relationships with other upstream activity
players. For example, if ingredients do not
meet quality standards, the regulated entity
could revoke the quality certificate and
notify everyone in the network who has a
relationship directly or indirectly with that
supplier. Receiving real-time updates on
food quality ingredients enables upstream
players to make better sourcing and
purchasing decisions and reduces the risk
of reputational damage as there is more
visibility of downstream activities.
Endorsements could be provided by
anyone who has direct contact with the
food ingredient. For example, a wholesaler,
restaurant or even the end consumer could
provide a review or rating through the
use of an application, effectively creating
a transparent review platform for the
ecosystem. This would be the first platform
to enable all supply chain stakeholders
to interact with one another directly
and share reviews to better improve the
food experience for all. As restaurants
become more technologically savvy, the
incorporation of such applications into
their service offerings would impact their
consumer base. Food critics’ reviews and
ratings could be incorporated into the
solution to provide the end consumer with a
360 degree view of the food they are eating.
12
When two chains combine | Supply chain meets blockchain

Food supply chain

Today

Input Farmers Aggregators Processors Wholesalers/ Retail

Providers Restaurants Consumers

Tomorrow

Input
Providers

Non-traditional
Logistics
Tech Suppliers

Aggregators Blockchain Retail

Consumers

Processors Regulator distributed real-time

update of information

Wholesalers/
Restaurants

13

Blockchain considerations and challenges
It is critical that organisations conduct a
comprehensive review and assessment
to ensure they can introduce controls to
mitigate and manage the issues associated
with blockchain implementation. Careful
evaluation of risks using Deloitte’s
Blockchain Readiness Framework can set
the foundations of a prosperous blockchain
journey. An organisation’s appetite for the
risks associated with blockchain may be
measured across three primary domains:
Standard Risk, Value Transfer Risk, and
Smart Contract Risk. Additionally, matters
such as levels of market adoption and
regulatory involvement raise concerns
across most nascent technologies.
Increased transparency, an inherent
capability and the most notable advantage
of blockchain, may cause some businesses
to think twice before progressing towards
implementation due to concerns about
competitive advantage and security.
However, the most common concerns,
detailed below, may be mitigated by
effective planning.
Source visibility
• Concern: Competitors might be able to
view supply chain sourcing details.
• Mitigation: The identities of parties
involved in a transaction or movement
of goods are hidden. Only their public
keys are visible to the rest of the network.
New public keys can be used for each
transaction for added security.
Supply chain security
• Concern: Using distributed ledger
technology might put supply chains at risk
of a cyber-attack.
• Mitigation: Blockchain’s underlying
capabilities provide data confidentiality,
integrity and availability, but as with any
other technology, organisations need
to have in place robust cyber defence
strategies.
When two chains combine | Supply chain meets blockchain
Data ownership Implementing an emerging technology
• Concern: A third party might own the invariably causes businesses to hesitate.
supply chain data. However, thorough evaluation of the
aforementioned considerations will
• Mitigation: Suppliers would need to
likely alleviate the risks associated with
be incentivised to share data and use
a blockchain implementation. Above all
the blockchain in conjunction with their
other considerations, creating a blockchain
internal local data system.
strategy today will support entities in
Transaction volume managing and developing solutions, which
• Concern: Competitors might be able to can then be shared across the business,
determine how much merchandise is remediating existing challenges and creating
moving. operational efficiency gains.
• Mitigation: The contents of a tracking How to take action
record on the blockchain can be Launching a blockchain journey may be
encrypted. simplified by planning the approach in the
incremental steps shown below:
How to take action
Internal Socialisation
1
Step
Begin the discussion now in order to gauge business and IT interest in
the potential applicability of blockchain within your business
Education
2
Having secured internal buy-in for the potential use of blockchain,
invest in establishing a working knowledge of the technology (what it is,
associated benefits, different types, etc.)
Ideation
3
Step Team with experts to determine the art of the possible for blockchain as
it relates to your business, including the creation of a blockchain strategy
and prioritisation of use cases
Use Case Design
4
Step Select the targeted use case and define the supporting architecture
and Minimum Viable Ecosystem (note that it is often advantageous to
start small as it allows for a quick win and demonstration of blockchain’s
potential)
Implementation
5
Step Rapidly progress the prioritised use case through iterative cycles,
establishing a go-to-market approach, business case and method to
create a commercial-scale product
14
When two chains combine | Supply chain meets blockchain

Blockchain’s capabilities in supply chain
management is an increasingly popular
topic, with proofs-of-concept being
developed across all industries. Early
entrants have the opportunity to team with
regulatory parties and founding providers
and to shape how blockchain technology will
function in their industry. With challenges
and risks clearly defined and evaluated, the
final consideration is whether your business
is ready to explore the new frontier of
blockchain technology.

Contacts
Authors Contributors

Lory Kehoe Eric Piscini

Director Principal, Global Blockchain
Deloitte Ireland Leader
lkehoe@deloitte.ie Deloitte Consulting LLP
episcini@deloitte.com
Kai Gindner
Director Guilherme Campos
Deloitte Switzerland Senior Consultant
kgindner@deloitte.ch Deloitte Ireland
guicampos@deloitte.ie
Darshini Dalal
Manager Shruti Jain
Deloitte Consulting LLP Consultant
ddalal@deloitte.com Deloitte Switzerland
shrutijajain@deloitte.ch
Danielle Andrzejewski
Senior Consultant
Deloitte Consulting LLP
dandrzejewski@deloitte.com

Niamh O’Connell
Consultant
Deloitte Ireland
nioconnell@deloitte.ie

Special Acknowledgments

We wish to extend our thanks to Deloitte global blockchain and industry

professionals from six different member firms namely Canada, China, Ireland,
Malaysia, Switzerland, U.K and the U.S. Specific thanks goes to Richard Bradley,
James Cascone, David Dalton, Jonathon Fox, Tom Hynes, Asim Kailash Agrawal,
Sarah Noble, Paul Sin, Nicholas Smith, Sunita Suryanarayan, Michael Woodword
and Lance Younger for their support of this publication.

15
 When two chains combine | Supply chain meets blockchain

Global Blockchain Labs

Deloitte Americas Blockchain Lab Deloitte APAC Blockchain Lab Deloitte EMEA Blockchain Lab
30 Rockefeller Plaza 35/F One Pacific Place, Whitaker Court,
New York, NY 10112-0015 88 Queensway, Sir John Rogerson’s Quay,
usblockchainlab@deloitte.com Hong Kong Dublin 2,
apblockchain@deloitte.com Ireland
EMEABlockchainLab@deloitte.ie

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16
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